ISLAMABAD: Pakistan’s finance ministry attributed the recent surge in the country’s stock market to a successful International Monetary Fund (IMF) review carried out by a visiting delegation of the global lender against the backdrop of improving macroeconomic situation in a report released on Sunday.

Pakistan has faced tough financial circumstances in recent years amid rapid depreciation of its national currency and dwindling foreign exchange reserves. The country is still striving to increase the inflow of dollars by actively seeking foreign investment.

So far, however, it has only managed to rely on friendly nations, such as Saudi Arabia, the United Arab Emirates and China, while seeking financial support from the IMF to shore up its economy.

The country’s finance ministry issued Monthly Economic Update & Outlook for November 2023, saying the economic situation was gradually improving due to the revival initiatives taken by the government.

“Positive economic signals and recovery indicators have triggered the market sentiment, propelling the KSE-100 index of PSX by 33% in November, surpassing the 58199-point mark for the first time in history,” the report said.

“The sustained monetary policy stance and successful IMF staff review in November drove the market confidence,” it added. “Owing to reforms in exchange companies and a reduction in illicit transactions, the exchange rate remains stable thus exerting a positive impact on overall economic activity.”

The finance ministry noted the stability in the exchange rate, ease in supply disruptions due to the removal of import restrictions and improved dollar liquidity had contributed to the overall economic upswing.

It recognized an increase in inflation to 26.9 percent on year-on-year basis in October 2023 as compared to 26.6 percent in October 2022, attributing the change major drivers including food and non-alcoholic beverages, housing, water, electricity, gas and fuel prices.

“Keeping in view the crop cycle of perishables,” it added, “the supply pressures are expected to be relieved from the end of November and onwards. Moreover, the reduction of fuel prices by the government would help further easing out inflationary pressures.”

The finance ministry said the overall positive economic signals and recovery indicators were steering the improvement in the gross domestic product outlook for the fiscal year.